Holiday Season Crunch 2025: How Tariffs, Rising COGS, and Supply Chain Chaos Are Squeezing Small Businesses
🎄 The Perfect Storm for Small Business
The holidays are meant to be the payoff for twelve months of hustle—but this year, many business owners are performing a financial high-wire act. Tariffs are nibbling at profits, COGS are rising, and stocking up for seasonal demand means tying up more cash in inventory than ever.
The question everyone’s asking: how do you keep your business profitable when your margins are melting faster than a snowman in July?
🚢 Tariffs and Import Costs: The Silent Margin Killer
If your business relies on imported goods, tariffs and import fees have probably been your not-so-secret holiday surprise. These costs don’t just raise your product prices—they echo through your entire supply chain, inflating your COGS and squeezing your margins.
Our insight: Track tariffs as a separate expense line in your accounting system. This helps you measure their true impact on your gross profit and tweak pricing before they eat away at your year-end success. Think of it as finding out who’s been sneaking cookies from the profit jar.
📦 Rising COGS Across the Board
From raw materials to packaging tape, everything seems to cost more this year. Freight prices are up, labor is pricier, and suppliers aren’t exactly handing out holiday discounts. Suddenly, your COGS reports look like they’ve had one too many eggnogs.
Our insight:
Update your cost data regularly—your COGS should reflect today’s prices, not last quarter’s.
Run a margin analysis before the holiday rush so you’re not losing money on your best-selling items.
Keep an eye on item-level costs; include shipping, duties, and handling to understand your true product profitability.
🎁 When Demand Meets Cash Flow Pressure
More orders are great—but fulfilling them takes cash, staffing, and a little patience from your vendors. Add tariffs, longer shipping times, and rising supply costs, and it’s easy for even well-prepared businesses to overspend before the first snowflake hits the ground.
Our insight:
Forecast cash flow to cover large inventory purchases and seasonal staffing.
Build a cushion for surprise surcharges and “oops” shipping fees.
Audit recurring expenses—cancel unused software subscriptions or renegotiate vendor terms to free up extra funds.
Remember: Santa might have unlimited magic, but your credit line doesn’t.
🧮 Smart Inventory Management = Sleigh-Speed Efficiency
In 2025, “set it and forget it” inventory systems simply don’t cut it. Between supply chain curveballs and fluctuating prices, real-time inventory tracking is your best friend.
Modern accounting tools can:
Sync with suppliers for up-to-the-minute pricing
Track tariffs, freight, and duties automatically
Show real-time profit margins so you can adjust pricing quickly
We help businesses implement inventory and COGS systems that keep up with market shifts—so you can focus on running your business, not running in circles.
✅ Quick Action Steps for Business Owners
Review vendor invoices for hidden freight or tariff surcharges.
Adjust pricing early to protect holiday margins.
Categorize costs accurately to analyze true profitability in Q1.
Run “what-if” scenarios (e.g., What if sales rise 20%, but COGS climb another 10%?).
Small steps now can save big headaches later—especially when your accountant isn’t the only one checking the list twice.
🎯 Final Thoughts
Between rising costs, tariffs, and the seasonal surge, it’s easy to feel like the financial Grinch is stealing your holiday joy. But with proactive bookkeeping, sharp inventory tracking, and clear-eyed cost management, your business can stay profitable (and maybe even jolly).
At the end of the day, the holidays are about connection, creativity, and resilience—and those are qualities small businesses have in abundance. So grab a mug of cocoa, tighten up those margins, and let’s make this season both joyful and profitable.
